If you have a land trust, you might wonder if it may be a good idea to also have a personal property trust. Even if you are only interested in investing in real estate, a personal property trust can be very useful. You will want to speak with a trust attorney if you are concerned about how a personal property trust might affect you from a legal standpoint.
How Personal Property Trusts Work
A grantor trust is a type of trust in which the owner of the trust is considered the owner of the assets and property for tax purposes. One type of grantor trust is a personal property trust. This type of trust only holds personal property and is not a land trust.
Real Estate and Personal Property Trusts
A personal property trust can be useful when you invest in real estate. When you have an LLC, you may be able to use the personal property when you hold a membership interest in the LLC. If you are asked if you own an LLC, you can state that the personal property trust owns the LLC.
You can state that you only own the trust which owns the LLC. This distinction can have a large impact on your finances, depending on the state in which you are investing.
A Place for Your Cars, Boats, and Other Property
A personal property trust can be very useful if you have a large number of very valuable pieces of personal property. The trustee for your personal property trust acts at your direction. You will not have to abide by income tax or gift tax requirements. You will have more privacy because your name will be kept off of private records.
Why You Need a Trust Lawyer
While there are several benefits that you will typically see from a personal property trust, you will still need to hire a lawyer to determine if the trust will be beneficial for your own individual circumstances. For example, you will need to determine whether the assets you own will justify a personal property trust or what benefits may exist based on state and local laws.
Then, once you decide that you would like to set up a personal property trust, your trust lawyer will set up the trust on your behalf. The attorney will help you set up a trust that is in compliance with the laws and helps you meet your financial needs.